PGMP · Question #270
You are the program manager for your organization. This program will last for two years and has eight projects. The cost of your program is $4 million and there are some risk concerns that may affect
The correct answer is A. Payback period. Management horizon is another term for the payback period - the amount of time it takes for a program's cumulative benefits (returns) to equal the total investment made. It answers the question: 'When will we recoup what we spent?' Management is asking how long the program must r
Question
You are the program manager for your organization. This program will last for two years and has eight projects. The cost of your program is $4 million and there are some risk concerns that may affect the overall cost of the program. Management is concerned with how long it will take the program to reach the management horizon. What is management horizon also known as?
Options
- APayback period
- BCost-to-benefits ratio
- CCost performance index
- DReturn on investment
How the community answered
(65 responses)- A89% (58)
- B6% (4)
- C2% (1)
- D3% (2)
Explanation
Management horizon is another term for the payback period - the amount of time it takes for a program's cumulative benefits (returns) to equal the total investment made. It answers the question: 'When will we recoup what we spent?' Management is asking how long the program must run before its benefits offset its $4 million cost. The cost-to-benefits ratio (choice B), cost performance index (choice C), and return on investment (choice D) are related financial metrics but are not synonymous with 'management horizon.' Payback period (choice A) is the correct equivalent term.
Topics
Community Discussion
No community discussion yet for this question.